Booming e-business revenues are helping to bring back the good times for two major enterprise software providers.
Baan — a subsidiary of UK engineering group Invensys — and German giant SAP recently both released upbeat trading figures, driven by strong demand from companies for e-business services.
The growth in areas such as supply chain management helped Baan return to the black in the last quarter of 2000 — six months earlier than expected.
The Dutch software house had been reporting losses for more than two years, and was on the verge of extinction when Invensys stepped in to buy it last August.Baan’s sales grew to $100m, an increase of 37% on the previous three months, helped by a particularly strong performance in north America.
Invensys — which spent the latter part of last year cutting jobs at Baan and re-motivating demoralised staff and customers — said it expects the company to produce similar sales this quarter.
Baan is poised to launch new products over the next few weeks, and plans to recruit extra staff in its fast-growing consultancy operation.
SAP, while never in any danger of going bust, also reported a return to strong growth after several flat years.
The German company reported a strong last quarter of 2000, with revenues up by almost a third on the same period in 1999. Sales of mySAP.com, its e-business platform, grew by more than 400% to e661m (£419m). E-business sales now account for more than half of SAP’s licence revenues.
Hasso Plattner, SAP’s chief executive, claimed the company was now successfully responding to the seismic shift in enterprise software caused by the internet. ‘All the pieces of our e-business strategy are in place,’ he said.
‘We have the customer wins and win-backs to prove that we have successfully re-invented SAP.’
Dan Roberts — a consultant at IT analyst Cambashi — said Baan and SAP were reaping the rewards of not allowing themselves to be left behind in the rush to e-business.
‘Three years ago all these companies did was enterprise resource planning,’ said Roberts. ‘Now they are getting a slice of the action in the current “must-haves” — the websites and the e-business behind them.’
Roberts added that the likes of Baan, SAP and others such as JD Edwards should also benefit when — he believes inevitably — companies also go back to upgrade their core ERP systems.
‘ERP hasn’t gone away,’ said Roberts. ‘It remains an important area that companies will have to invest in. It just isn’t glamorous at the moment.’
Roberts believes the jury remains out on Baan, despite its encouraging last quarter. ‘Invensys is a good owner for Baan, but whether it can actually integrate it with its other products won’t be clear for a while yet.’